Wishful thinking: “a pattern that recurs in personal lives, in politics, in history – and in storytelling. When we embark on a course of action which is unconsciously driven by wishful thinking, all may seem to go well for a time, in what may be called the “dream stage”. But because this make-believe can never be reconciled with reality, it leads to a “frustration stage” as things start to go wrong, prompting a more determined effort to keep the fantasy in being. As reality presses in, it leads to a “nightmare stage” as everything goes wrong, culminating in an “explosion into reality”, when the fantasy finally falls apart”.

According to the wishful thinking of The Economist, 1997’s handover may result in Hong Kong taking over China with a bag of Hong Kong dollars and the rule of law. Well, see how that worked for the five kidnapped booksellers last year. We all know how dictators become wise, honest politicians who do NOT kill their own people, right? Hence The Economist stupid question: “What if, instead of China taking over Hong Kong, Hong Kong takes over China? […] Could something similar happen when it comes to politics and the rule of law?”

According to The Economist, China abandoned their socialist autarky in 1978 due to foreign investment, which led to a transformation within the Chinese economy resulting from the new economic policies of Deng Xiaoping. 60% of the money flowing into China had come from Hong Kong, especially into the blooming southern province of Guangdong. From this, the reporter responsible for the column jumps forward into the future, skipping 20 years of history, and claiming that in the next 20 years China will become more like Hong Kong. But, how about the change of legislature?

The Economist believes that, although fears of interference from Beijing are well founded, “the more reflective members of Beijing’s political class must know that China’s system of centralised political control is brutal, inefficient and inherently unstable.” Hong Kong could then become unstable and this is something those Chinese elites would never want. Conclusion: They will not try to influence Hong Kong, but to use Hong Kong as an experiment to improve China. Because, once more, we all know that dictators want the best for their people.

But China “is ripe for political change”, the reporter says, quoting their Communist leaders: “a widening of democracy must await the development of a richer and more sophisticated society.” New leaders will bring new challenges and new changes.

The Economist misreads history

As it happens with most Western and Chinese analysts –the former by ignorance, the latter by negligence–, they tend to forget the importance of the Tian’anmen Massacre for the economic development of China. You can read more about this in our review of Yasheng Huang’s book, Capitalism with Chinese Characteristics.

Long story short, China did not abandon socialist autarky after the economic reforms of 1978, but decided to use Hong Kong as a proxy for rich party members to evade their own regulations. As early as 1960, the director of the Overseas Chinese Affairs Office Liao Chengzhi asserted that Hong Kong’s colonial status was to their own benefit, because “Through Hong Kong we can trade and contact people of other countries and obtain materials we badly need.” Deng Xiaoping’s new policy of “One Country, Two Systems” was just an improvement of this idea: to increase Communist influence over Hong Kong without losing the benefits of Capitalism. In another words, “One Country, Two Systems” basically means “Rule of One Party, Benefit from Two Systems: Communism over the people, and Capitalism in our pockets.”

Thus, when The Economist states,

“The official version of history […] is patently self-serving and largely false. Indeed, China’s recent past suggests an entirely different interpretation. The great tragedies of recent times […] were the results of crazy policies imposed from the centre. By contrast, […] the breathtaking economic growth of recent years, got going only when Deng Xiaoping had the wisdom to let regions experiment economically.”

He forgets that those reforms were stopped and reversed after the Tian’anmen Massacre, which was the direct result of those policies: more economic freedom means, ultimately, that people will have more possibilities for personal development and will eventually request other freedoms, such as freedom of association, freedom of religion, freedom of speech, and so on. And let’s forget not: The Tian’anmen protestors were neither capitalists, not libertarians, but true believers in the cause of Communism. They were against the most recent, restrictive policies of Deng Xiaoping and sided with his enemies within the Chinese Communist Party.

The economic growth of China, then, is not the straight line The Economist simplistically pretends, but rather a more complicated scenario: In 1978 economic reforms led to economic growth, but they were stopped in 1990 immediately after the Tianan’men Massacre and the leadership change of the Chinese Communist Party, which became again centralized –with Peking, the capital, as the most important place for development–. During this period, and up to 1997, many companies ran away and established themselves in Hong Kong as Foreign Investment Enterprises, thus avoiding China’s government interference but sending the money back to their own country. The fact remains that growth has been limited to a few, politically favored cities, and that Hong Kong had already started to work as proxy for the Communist regime.

Finally, let’s take on two of the previous assertions by The Economist: First, that “the more reflective members of Beijing’s political class must know that China’s system of centralised political control is brutal, inefficient and inherently unstable.” Well, as a matter of fact this was already stated by Zhou Enlai in 1959 and reinforced by the aforementioned Liao Chengzhi one year later. That’s why they need Hong Kong. And if any Party member becomes too reflective, thou shalt worry not: They will be purge promptly. That is how Communism works in the real world.

Secondly, how about China saying that “a widening of democracy must await the development of a richer and more sophisticated society”? Mao Zedong famously said in 1943 that “Let democracy and science be the bond between the Chinese and American nations” and, two years later, “To completely crush Japanese invaders, democratic reform must be conducted nationwide […] It is impossible to do that if we do not abolish the one-party rule of the Kuomintang and build a democratic coalition government.” And four years later he founded a one-party anti-democratic Communist Republic responsible for the deaths of more people than Stalin and Hitler combined. That’s how much you can trust China’s Communist regime and their eager-to-change leaders.